The International Monetary Fund's (IMF) Article IV Consultation Report indicates that Turkey has preserved its growth resistance despite various shocks.
According to the Article IV Consultation Report involving the IMF's evaluations regarding Turkey, published on April 22, the IMF Board Committee is pleased with Turkey's growth performance in 2015. The report indicated that the country has been preserving its economic growth despite various shocks, and domestic demand-based growth is continuously supported by expansionary monetary and fiscal policies. The report indicates that domestic consumption will increase more due to the minimum wage hike, which rose by about 30 percent this year, and loosened macro-prudential arrangements; however, the external disequilibrium will also escalate along with the increasing consumption and foreign exchange inconsistencies of the non-banking sectors.
Stressing that the possible acceleration in capital outflows poses a risk for the economy, the report said the economy has been preserving its fragility against external shocks. Therefore, the priority is to balance the economy by increasing the percentage of domestic savings, which was maintaining its low level due structural reasons, and also decreasing the external disequilibrium. According to the report, Turkey has put out an assertive reform in this matter, and the reforms in terms of savings, productivity and increasing women's share in the labor force should be prioritized.
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